Central government funding for the other duties of the counties
On 18 May 2017, the Government presented a supplementary proposal to Parliament to amend the Act on the Financing of the Counties. The proposal concerns funding for the duties of the counties other than those related to the health and social services reform, environmental health care and rescue services.
The counties to be established will assume a wide range duties hitherto carried out by municipalities, regional councils, municipal partnership areas, centres for economic development, transport and the environment, employment and economic development centres and regional state administrative agencies. The proposal (HE 15/2017 vp) to provide financing for the performance of these duties (listed below) and to amend the Act on the Financing of the Counties currently being reviewed by Parliament was given on 18 May 2017.
Financing for duties other than those related to the health social service reform, environmental health care and rescue services would be provided by reallocating part of the appropriations earmarked for the current duties of the various administrative sectors to a universal fund made available to the counties and by leaving part of the financing granted to the counties for allocation as specific funding for the individual administrative sectors as before.
The guiding principle is that the funding made available to counties will be universal by nature and allocated in accordance with the Act on the Financing of the Counties. The criteria for allocating central government funding for such other duties would include:
- the size of population;
- population density;
- needs-based factors (number of unemployed job-seekers, unemployment rate and number of company sites)
- farm relief services (number of agricultural undertakings).
Additionally, specific funding would be made available to counties to finance duties in respect of which the counties will not have any discretionary powers and that affect a very limited geographical area. Specific funding based on special laws and the state budget would only be used if special grounds exist for doing so.
The proposal for the Act on the Financing of the Counties currently being reviewed by Parliament and the supplementary proposal constitute the complete proposal for financing the duties to be carried out by the counties.
Financing at 2017 prices and review of funding
At 2017 prices, total universal funding based on all the duties to be assumed by the counties would be approximately EUR 18.5 billion, with the financing to be provided for the other duties of the counties accounting for approximately EUR 1.0 billion. Consequently, other duties would account for approximately 6 per cent of total funding. Additionally, approximately EUR 2.9 billion would be reserved in the state budget for financing these other duties.
The central government funding made available to counties would be reviewed annually based on the costs incurred in the last year on which statistics are available. When the amount of central government funding is determined, due consideration would be given to the actual client and operating revenues and sales proceeds earned by the counties.
The funding ceiling for health and social services costs specified in the Act on the Financing of the Counties will not apply to funding made available to counties to finance other duties. In the determination of the funding for other duties, the annual change in cost levels would only be considered in the case of staff costs. In this respect, the proposal would not affect the existing state of affairs.
Additionally, the funding made available to counties could be increased on a discretionary basis should the county face extraordinary or temporary financial difficulties. Discretionary funding could also be provided when a county needs additional funding because of financial problems in the county economy due to the reform of the financing system.
Duties of the counties’ other administrative sectors
As well as health and social services, environmental health care and rescue services, the counties would be responsible for the following duties:
- regional alcohol licensing;
- agricultural and rural development;
- arrangements for the marketing of agricultural produce, the safety, quality and use of agricultural inputs and monitoring of plant health;
- fishing and management of water resources;
- the duties of the regional development authority; development and financing of the regional economy and innovation environments; training and skills development related to the foregoing; promotion of culture; organisation of corporate, employment and business services; and promotion of the integration of immigrants;
- anticipation of educational needs in the short, medium and long term and establishment of regional objectives for training and education;
- regional planning;
- promotion of municipal land use planning and construction;
- promotion of the protection of biodiversity and management of the cultural environment;
- effectiveness of traffic and transport arrangements; traffic and transport safety; road and traffic conditions; regional road maintenance; cooperation in land use planning; and generation of data on the operating environment for use in national transport system planning;
- state aid duties related to private roads and mobility management;
- establishment of regional sports councils in collaboration with other counties and duties related to outdoor exercise trails;
- promotion of county identity;
- coordination of culture-related plans and development efforts as part of the implementation of the county strategy and programme and regional planning;
- promotion and planning of water supply systems; duties related to the use and management of water resources and floods; duties related to the management of regional natural resources; and management of the implementation of works related to the environment, water supply systems and watercourses;
- protection of watercourses and seas; organisation and implementation of the management of watercourses and seas as well as sea area planning;
- generation of environmental data and raising of environmental awareness;
- contingency preparedness in the country and coordination of regional contingency preparedness;
- organisation of relief services for agricultural entrepreneurs and fur farmers and reimbursement of the cost of temporary help for reindeer husbandry;
- regional advisory boards on Romani affairs and Romani-related duties;
- organisation and development of regional joint services.
Additionally, counties could manage the regional development and organisation of transport services as well as the planning and organisation of public passenger services including related state-aid duties excluding the operations in the operating areas of municipal and regional authorities and the planning and organisation of transport in these areas as well as rail transport.
Counties could also manage the planning and organisation of transport services in the archipelago as well as international and EU affairs and contacts related to the counties’ duties.
Budget Counsellor Virpi Vuorinen, Ministry of Finance, tel. +358 (0)295 530 557 (legislation)
Senior Financial Adviser Tanja Rantanen, Ministry of Finance, tel. +358 (0)295 530 338 (steerage of counties and calculations)
Special Adviser Miikka Vähänen, Ministry of Finance, tel. +358 (0)295 530465 (specifically calculations concerning the financing of the counties’ other duties and the financing of social and health and rescue services)
Senior inspector Antto Korhonen, Ministry of Finance, tel. +358 (0)295 530 547 (specifically financing for the duties to be assumed by counties)